Sigrún Davíðsdóttir's Icelog

Landsbanki Winding-Up Board sues managers, non-execs and insurers for ISK45bn

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The Landsbanki Winding-Up Board is suing the top management of the bankrupt bank, board-members and insurers for damages caused by not stopping the bank’s operations on October 3 2008 when, according the the WUP, the bank was de facto bankrupt. In total, the WUB claims the damages amount to ISK45bn (€282m).

Those who are sued are CEOs Sigurjon Arnason and Halldor K Larusson, board-members Andri Sveinsson, Kjartan Gunnarsson, Svafa Gronfeldt and Thorgeir Baldursson, in total for £89m, in ISK, euros and dollars. In addition, 25 companies that insured the bank’s management are being sued by the WUP to pay together with these indivivuals, in total £91m. In addition, Jon Thorsteinn Oddleifsson, who was head of treasury, is sued for ISK11bn (€69m). Bjorgolfur Gudmundsson, the bank’s chairman, who, together with his son Bjorgolfur Thor, was the bank’s biggest shareholder, is not being sued. He is bankrupt and consequently unable to pay any damages.

The claims are based on money going out of the bank on its last day of operation October 6 2008, in total ISK35bn (now €219m). This money went onto the accounts of MP Bank, Straumur and Landsvaki, one of Landsbanki’s own money market funds. The dates are important because this means that according to the WUB the bank was already bankrupt when the British authorities closed down the bank.

The claims have beein presented to those who are being sued but have not yet been made public. It’s likely that the claims contain quite a bit of interesting information on the bank’s ownership. Father and son owned 41.5% in Landsbanki at the time it collapsed but the feeling is that they did in effect control a much larger part of the bank.

According to the SIC Report at least 12.5% of the bank’s shares were held in Landsbanki’s own offshore companies, controlled by the bank. The companies was apparently to hold employee option but were never used for that purpose. Other entities owned by the bank might have owned shares in the bank, in addition to shares owned by Straumur Investment bank, where father and son were the major shareholders and the son chairman of the board.

A group of small investors in Landsbanki, who are preparing to file a private suit against Bjorgolfur Thor, might find some interesting ammunition in the WUB claims.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

January 17th, 2012 at 11:17 pm

Posted in Iceland

3 Responses to 'Landsbanki Winding-Up Board sues managers, non-execs and insurers for ISK45bn'

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  1. Thank-you for the posting.
    I’m Kaupthing IoM
    I’m here courtesy of “Anrigaut’-
    Nice post, I don’t have much to say except thank-you.
    I believe, like you obviously do, that is important not to forget.
    The bastards that ripped us off might no longer be billionaires but they live comfortably with the money they hid at teh time. Some of us don’t have the same luxury.
    I think that each month, see the FED’s releases this month, that these guys knew that they were sucking out their profits at the last moment, They deserve to lose them and we deserve to receive something ot their current wealth.
    The lesson of this debacle is that there is a legal imperative to behave morally.
    Your ‘viking enterpreneurs were pirates. Deliver them up.


    20 Jan 12 at 12:35 am

  2. […] Landsbanki Winding-Up Board writ against managers and board members of Landsbanki contains further insight into ownership and the […]

  3. Thanks from me too Sigrun for sticking with it. Your quiet but dogged persistance in trying to get at the truth really is appreciated. And, as Monte Cristo so rightly says, it is important not to forget.

    From this latest, and a number of similar cases recently filed by the WUBs of all three collapsed banks, we who were left to take the rap when the pirates took what they could and ran take some hope that some real justice may yet be wrought and the main perpetrators will feel some of the pain they inflicted on others, both in Iceland and abroad,by their apparently unbounded greed.

    Best wishes for the year ahead.


    20 Jan 12 at 9:56 pm

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